A current account deficit implies that
A) the country is a net lender with the rest of the world.
B) the country is running a net capital account surplus.
C) foreign investment in domestic securities is at very low levels.
D) All of the above.
B
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The ________ the nominal interest rate, the ________ is the quantity of money demanded
A) lower; greater B) higher; greater C) more variable; smaller D) lower; smaller E) None of the above because the nominal interest rate does not influence the quantity of money demanded.
A commercial bank has excess reserves of $10,000 and a required reserve ratio of 20%. It grants a loan of $8,000 to a customer, who then writes out a check for $8,000 that is deposited in another bank. The first bank will find its reserves decrease by:
A. $2,000 B. $3,000 C. $1,600 D. $8,000